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Carbon reporting tools head towards the corporate mainstream

Late last year I wrote a story predicting that as more and more firms set targets to reduce their carbon emissions they will need new reporting software tools capable of automating their measurement and monitoring processes and integrating environmental metrics into their existing business applications.

Well, while I was busy making blindingly obvious predictions programmers were obviously busy developing these new tools and consequently the last week has seen a wave of new carbon reporting software modules hit the market.

The first announcement came from IBM, which unveiled an extension to its Zodiac service providing customers with a new toolset for measuring the carbon emissions associated with their datacentre. The new functionality, which forms part of IBM's recently announced $1bn a year Big Green initiative, effectively applies an algorithm to the energy consumption data already collated by IBM's datacentre management software that automatically calculates the likely carbon emissions. Firms can then incorporate the data in their environmental reports or use the figures to determine how much carbon they should be offsetting.

Next up came expense management software specialist [email protected], which has added a similar carbon reporting module to its expense and billing software capable of automatically calculating employees' carbon emissions based on their travel expenses.

"The new module will give people an easy way of calculating their [carbon] footprint," explained Michael Sheehan, managing director at the company. "You don't have to go through an extra stage of using an online carbon calculator; the carbon data is built into the process and is there in the employee's face."

The system boasts more complex algorithms than the IBM toolkit, applying different emissions calculations for flights, car travel and train journeys and incorporating more granular information such as the fuel efficiency of a company car. However, just like the IBM tool, it aims to apply automated carbon emission calculations to existing data, thus making it easier for firms to generate environmental reports and metrics, and ultimately encourage staff to limit their carbon footprint.

Completing the recent wave of environmental reporting software suites and arguably providing the clearest example of how such tools could drive carbon footprint reductions is a new suite from Australia-based consultancy Supply Chain Consulting.

Launched in Europe last week, the company claims the new CarbonView suite integrates together all the various databases used to manage a firm's extended supply chain and then applies a reporting platform capable of calculating the carbon and broader environmental footprint from each stage of the supply chain. As a result, the suite can surface data on carbon emissions and other environmental metrics from the entire supply chain, including manufacturing and agricultural processes as well as supply chain transport.

Peter Klein, vice president for EMEA at the company, said that the automated calculations were based on the UN-backed Greenhouse Gas Protocol Initiative's guidelines and also allowed firms to apply anyone of five different carbon emission allocation methods currently vying to become a global standard. "You need to be able to apply all the allocation methods being discussed and have the flexibility to move to the one that ultimately becomes standard," he said. "That is one of the reasons it is so difficult for the ERP vendors to embed this reporting functionality into their apps."

The suite also boasts modeling functionality that allows firms to assess how certain suppliers, supply chain configurations and investments will impact firms' carbon emissions and costs. "The 'what if' modeling functionality is one of the most popular parts of the suite," said Tony Carr, chief executive at the company. "If you've got five sites you could source a product from, you can use the suite to work out the optimum supplier based on your cost and carbon targets. It also means you can work out what would happen to your carbon footprint if you invested in new carbon scrubbing technology for a factory, for example."

Intriguingly, Carr also claimed that while the reporting functionality draws on data spread across the extended supply chain it still provides only a "macro" view of a supply chain's carbon footprint and as a result the company is currently working with Oxford University and MIT to develop more granular, transactional level reporting and modeling capabilities capable of ultimately calculating the embedded carbon of each individual product and each part of the supply chain.

It is functionality that is likely to enjoy considerable customer interest if firms adopt the UK government's recently promised standard for calculating embedded carbon and Carr is convinced that the embryonic carbon reporting software market is already on the verge of breaking into the mainstream.

"Big companies know they are going to be forced into reporting on emissions at some stage and realise that early adopters [of reporting software] will enjoy the best returns," he said. "This has to be a software [suite] play, firms can't do these calculations for an extended supply chain with a spreadsheet."